Monday, October 22, 2007

[PBN] EU will not save sugar industry: Academic


Sunday October 21, 2007

A university academic says European Union subsidies can not save Fiji's
ailing sugar industry and the government should focus on agriculture

In his preview of the 2008 National Budget (to be announced late next
month), Professor Duncan, the executive director, Pacific Institute of
Advanced Studies in Development and Governance at the University of the
South Pacific says the sugar industry was never going anywhere but
downhill, even when it had the full benefit of European Union (EU)

"So it is hard to argue that EU subsidies can save it," he said. The EU
has promised millions of dollars of aid to reform Fiji's sugar industry
to make it more efficient, but this was stalled after the December coup.
Aid is to be restored once the interim government makes a commitment to
bring Fiji back to parliamentary democracy.

Professor Duncan went on to say that the sugar industry should not
receive any assistance other than to help farmers move into other
farming activities, and to rationalize the milling sector down "to no
more than two mills".

Fiji currently has four sugar mills: Lautoka, Labasa, Rarawai and
Penang. Finance and Sugar Minister Mahendra Chaudhry last month
highlighted the possibility of a fifth sugar mill in Seaqaqa, Labasa
(Fiji's second biggest island). He is also pushing for the processing of
ethanol from molasses.

Professor Duncan does not believe ethanol production is going to save
the sugar industry.

"Whether the mills are producing sugar or producing ethanol, the
inefficient costs of cutting, transport and milling will still be there.

"He says the World Bank had told (Laisenia) Qarase (Fiji's deposed prime
minister) this in no uncertain terms "but he was not inclined to listen".

Regarding agriculture, Professor Duncan says in that in order to make it
successful, many major obstacles have to be overcome, including
quarantine barriers for exports, poor quality of local horticultural
products, difficulties in securing good access to land and finance, and
difficulties in establishing commercial activities in the indigenous
village sector.


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